§ The Earl of Riponproposed the second reading of the Three-and-a-Half per Cents Bill. The object which they had in view was to reduce the interest upon those annuities from Three-and-a-Half per Cent. to Three-and-a-Quarter per Cent. in the first instance, and ultimately to Three per Cent. His Lordship described the mode in which it was proposed to effect this object, as detailed elsewhere by the Chancellor of the Exchequer, and congratulated the House on the fact, that the state of the actual resources of the country enabled them to make this important change, and give the public the benefit of this great saving, without adding to the permanent debt of the country.
Lord Broughamexpressed his entire approval of the measure as being one of vast public benefit, and said, that the operation testified to all Europe the solidity of the resources of this country and its untouched credit, a reputation which they owed to their having religiously abstained on this side of the Atlantic—that was, the European English had abstained from doing anything that might have a tendency, or the shadow of a tendency, to impeach the right of the creditor to be paid by his debtor. The manner in which this measure had been planned and carried into execution deserved the highest praise. Instead of effecting this reduction of interest by giving a bonus, or by any other plan by which the capital of the public debt would be increased, there had been a careful avoiding of making any increase to the capital of the debt. Such a proceeding must give additional Confidence to the country and to the friends of this country in the stability of its resources.
§ Lord Monteaglesaid, the change was a very important one, and if he differed with the mode in which it had been carried into effect, it was as to details only. With the general mode in which the proposal had been carried out he entirely 1161 concurred. The measure was one of unexampled magnitude, affecting an immense mass of capital, yet there had not been the slightest alarm caused by it, although there were no less than 81,000 holders of stock whose dividends were under 10l. This was to be attributed to the great confidence those holders had in the resources and in the good faith of the country. The arrangement was the more satisfactory, because it was not made by any undue tampering with the credit or currency of the country. It was effected on sound and rational principles. If they had a large surplus revenue with which they could effect the reduction, the operation could not be considered unjust, when there was a great reduction in the interest of money throughout the country at the same time. It was not then a question of choice, but of paramount duty to take that step. Whatever might be the pressure on individuals, it was the bounden duty of Government to propose the reduction for the purpose of assisting the credit of the country. The great reduction of interest on money was not altogether an unmixed benefit. The lowering of the value of money tended to increase speculation in the same ratio, and this had, on former occasions, been attended with great public inconvenience and mischief. There were some evils from which they were somewhat protected at present. Formerly the low rate of interest induced people to invest their capital in all kinds of foreign securities; but he believed the experience of what had happened within the last ten years tended very much to guard against the recurrence of that evil. They found in the end that the British Funds were the best and safest. If they looked to what occurred in the Old and the New World in that period, it would prove the importance of maintaining public credit. If the American States had maintained their credit, they would now feel the advantage of the employment of British capital, their territory would have afforded us the best market for our products, and the advantages would have been reciprocal. In 1824 there was a great abundance of money; that was followed by the subsequent over-speculation and calamity of 1825 and 1826. He believed, that there was still a tendency to such exaggerated speculation, and there would be some danger of it in the trade recently opened 1162 with China; he understood this trade had been carried to a great excess and consequently the profits would be found far from remunerating. This was a great reduction, and it proceeded on just and sound principles. It would add to the public revenue no less a sum than 1,200,000l. per annum. He, therefore, hoped on this, as well as on other grounds, that they should obtain a remission of the Property and Income Tax at the time originally fixed. He also hoped that the opportunity would riot be lost for a revision of the taxation of the country. The country was much obliged to the Government for the changes they had introduced into the Customs' Laws last year, and he trusted they would in justice to themselves explain in that and the other House of Parliament the effect which those alterations had produced, because he believed they would find that in proportion as they applied those principles which ought to regulate Financial and Customs' legislation, they had profited by those measures. He could not sit down without observing, that the diminution in the charge of the Public Debt made by the country since the close of the war had been greater than the most sanguine prophet could by possibility have anticipated. The reductions made, and which might be made within a period which many of their Lordships might expect to live to see, were as follows:—
| Annuities for terms expiring between 1841 and 1864 | £2,506,529 |
| Annuities for lives | 831,665 |
| £3,338,194 | |
| Bank of England dead weight annuity | 585,740 |
| £3,923,934 | |
| Saving on interest of funded debt from 1822 to 1850 | 2,700,000 |
| £6,623,000 |
§ The success of the experiment proved the credit of this country to an infinitely greater extent than if they had kept up an immense amount of taxation for the purpose of keeping up a Sinking Fund. If they had kept up a Sinking Fund of 5,000,000l. or 6,000,000l. a-year, they could not have operated such an amount of reduction with the same certainty. He objected to the guarantee that was given, as it was often an inconvenience—a Government being thus tied down by the 1163 acts of its predecessor, and he must say that upon principle it was to be desired that a somewhat longer notice had been given to the holders of stock. The Bill would not receive the Royal Assent until Thursday, and the time for giving notice was to expire on Saturday. This would operate as no practical grievance, he admitted, in this instance, because it would not be for the interest of the holders to object to the terms; but still he thought that on principle a longer period should have been allowed.
§ The Earl of Riponwas glad to find that the noble Lord's objections were confined to the details of the measure. With regard to the notice it had been limited, and he admitted that it might have been advisable to have given a more extended notice, as they had done on similar occasions; but when they dealt with a subject of this magnitude, it was important that the transaction should be closed at as early a period as possible, and as no essential injury to the parties interested could ensue, he must confess that as a matter of principle he did not feel that the Government were called upon to give longer notice. His noble Friend had alluded to the guarantee. He did not object to the principle, that it was, in general, inconvenient for a Government to tie itself up in this manner for a series of years; but it must be granted that in this case the holders of the stock were entitled to some bonus. They had received no bonus by any increase to their capital, and when it was considered that there were 81,000 holders of this stock, whose income did not exceed 10l. a-year, as they had no bonus in their capital, it seemed but fair and reasonable that they should have such a bonus as that which was granted to them by this measure. In respect to what his noble Friend (Lord Monteagle) had said touching the diminution of the Public Debt, that statement was, no doubt, an accurate one, and afforded a strong proof of the high character and credit of this country. In the year 1829 he had himself called the attention of their Lordships' House to that subject. Between the year 1815, when that charge was at its highest, and the year he had just referred to, the diminution of this charge had not been less than 4,000,000l., representing a capital of 120,000,000l. Since that period other reductions had taken place; and, making 1164 allowance for the 20,000,000l. required to carry into effect the measure for the abolition of slavery, the reduction in the charge for the funded and unfunded debt was considerably more than 4,000,000l. annually. This showed most clearly and satisfactorily, that while they scrupulously respected good faith, they were enabled from time to time to get rid of some portion of their debt.
§ Lord Monteaglesaid, there was one part of the scheme which had scarcely been remarked upon, but for which he thought the Government deserved particular credit—he meant the equalization of the dividends. There was, perhaps, no measure apparently so small from which greater benefit might be expected to flow.
§ The Bill was then read a second time, as was also the Three-and-a-Half per Cent. (1818) Annuities Bill, and (the Standing Orders being suspended) both Bills passed through Committee.
§ Ordered to be read a third time.